The present invention relates to the art of Internet commerce. It finds particular application in conjunction with Internet credit and/or debit transactions, and will be described with particular reference thereto. However, it is to be appreciated that the present invention is also amenable to other like applications.
Internet commerce, or e-commerce as it is otherwise known, relates to the buying and selling of products and services over the Internet. The convenience of shopping over the Internet has sparked considerable interest in e-commerce on behalf of both buyers and sellers. Internet sales or like transactions have been typically carried out using standard credit and/or debit cards such as Visa®, MasterCard®, Discover®, American Express®, or the like. However, while widely used for more traditional face-to-face transactions, use of these standard cards and their associated processing systems in connection with e-commerce presents certain difficulties.
In particular, for example, the standard card transactions typically involve a relatively high number of intermediaries that are used in processing the transaction from an initial purchase request, through authentication and authorization, and ultimately to settlement. In addition to the actual buyer and seller, the cast involved in ultimately completing the transaction through to settlement typically entails member banks including a merchant or acquiring bank and an issuing bank. Often, an Internet processor (e.g., Cybercash), member service provider (MSP), or an independent sales organization (ISO) is also involved. Additionally, third party processors, agent banks, and/or deposit banks are commonly employed. As each intermediary charges a bulk, per-transaction, percentage, or other like fee for its role in handling the transaction, the total transaction cost grows with each additional intermediary employed. Consequently, streamlining transaction processing and elimination of intermediaries beneficially holds transaction costs down.
Buyer confidence and security are also issues facing Internet commerce. The fact that e-commerce transactions are not carried out face-to-face often creates apprehension in a potential buyer regarding transactions. This apprehension is fueled by uncertainty of the reputation or quality of the seller with whom they are dealing and the security of their credit and/or debit card information or other personal information (e.g., address, credit card number, phone number, etc.) typically submitted along with a traditional credit or debit card e-commerce transaction. Additionally, the account holders, sellers and financial institutions are concerned about safeguarding against fraudulent or otherwise unauthorized transactions.
For example, once an initial transaction has taken place, wherein a customer or account holder provides their identification and account information to a seller, the seller, whether operating via the Internet or via a traditional brick and mortar store front, has all the information needed to accidentally or fraudulently charge a customers account for goods or services that were not actually purchased. Furthermore, every employee of the seller who comes into contact with the customer identification and account information has the ability to use that information to initiate fraudulent transactions.
Similarly, sellers or merchants as well as funding sources are concerned that purchases are made by valid account holders. As outlined above, the fact that some one has access to an account number and other identifying information is not a guarantee that a customer is the authorized account holder. For example, children can use a parent's credit cards without permission, resulting perhaps in returned merchandise. Credit cards or account information can be lost or stolen and used by unauthorized personnel to make purchases resulting in one of the account holder, the merchant, or the funding source suffering a theft loss. Additionally, data entry errors and the like can result in multiple charges for a single purchase.
Yet another issue is convenience for the buyer. As more and more transactions are carried out online, the repeated typing of required transaction information such as, for example, name, credit or debit account information, and/or shipping address information becomes tedious and aggravating. Furthermore, writing checks to settle accounts is a tedious and often overlooked task resulting in delayed payment for sellers and late charges for consumers.
The present invention contemplates a new and improved transaction processing system and technique for carrying out credit and/or debit transactions over the Internet that overcomes the above-referenced problems and others.